The Australian Securities and Investments Commission (ASIC) has made a welcome amendment to the new reporting requirements under the class orders (Class Orders) which provide certain foreign financial service providers conditional exemptions from the need to hold an Australian financial services licence (AFSL).
Amendments to the Class Orders in June introduced new reporting obligations for foreign financial service providers relying on the Class Orders.
One of the new obligations required foreign financial service provider to report to ASIC as soon as practicable (and in any event within 15 business days) after the provider became aware or should reasonably have become aware of each significant investigation taken by an overseas regulatory body.
The obligation to report to ASIC details of “significant investigations” can conflict with legal obligations imposed by foreign law or regulators on the foreign financial service provider such as laws that make it an offence to disclose the details of any investigation. This would have left providers under investigation in a very difficult position.
We raised this issue with ASIC and yesterday ASIC amended the Class Orders to address this unintended consequence. Providers need not report significant investigations to ASIC if after having taken reasonable steps to enable notification to be given to ASIC, the provider is prohibited by law from giving such notification. This exception applies only to the extent that the prohibition prevents notification to ASIC.
For further information about the June amendments to the Class Orders please see our earlier alert.